What is ERP?

Enterprise Resource Planning or ERP is a term describing multi-module application software packages that are designed to support multiple business functions. An ERP system can include software for manufacturing, order entry, accounts receivable and payable, general ledger, purchasing, warehousing, transportation and human resources. Evolving out of the construction industry, Enterprise Resource Planning implies the use of packaged software rather than proprietary software written by or for one customer. ERP modules may be able to interface with an organization's own software with varying degrees of effort, and, depending on the software, ERP modules may be alterable via the vendor's proprietary tools as well as proprietary or criterion programming languages.

By becoming the integrated info solution across the entire organization, ERP schemes allow companies to better understand their business. With Enterprise Resource Planning software, companies can standardize business processes and more easy ordain best practices. By creating more efficient processes, companies can concentrate their efforts on supporting their customers and enhancing bottom line profit.

Industry analysts anticipate that every major manufacturing company will buy the software, which ranges in cost -- with maintenance and training -- from hundreds of thousands of dollars for a small company to millions for a large company. AMR Research of Boston says consolidation among the major players will continue and intensify. ERP marketer are expected to put more effort into e-commerce, CRM and SCM initiatives, with leaders redirecting between 45% and 80% of their Research and Development budget to projects like this. This is why Enterprise Resource Planning is so important.